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Individuals unable to pay off their loans will be declared bankrupts, the country’s Pesident Nursultan Nazarbayev said when speaking at the extended sitting of the Government today.
Individuals unable to pay off their loans will be declared bankrupts, the country’s Pesident Nursultan Nazarbayev said when speaking at the extended sitting of the Government today.
“Borrowers must pay off their loans either in monetary form or through foreclosure of their property. There is no place for those willing to live at the state’s expense. If someone fails to pay off his or her debts, foreclosure procedures should be applied just like it is done in the rest of the world”, the President said, adding that he had been receiving a lot of letters from people asking to have their debts written off.
“Let’s imagine I borrowed from you and then suggest writing my debt off. No economy will be operating properly if the citizens don’t pay off their debts. All developed countries practice foreclosure procedures. Everyone understands what foreclosure procedures entail”, he said.
The Government should teach Kazakhstan’s citizens to pay off loans, Tengrinews.kz reported in April, citing the country’s President Nursultan Nazarbayev as saying.
“Kazakhstan’s people haven’t learned to pay off their loans … and the country’s leadership has been trying to be too understanding”, President Nazarbayev said when speaking at the sitting of the Foreign Investors' Council (FIC) at that time.
According to him, the share of NPLs is the most alarming in agriculture. “Every year the sowing campaign entails a big wave of NPLs”, Nazarbayev said.
Central Bank Governor Kairat Kelimbetov advised Kazakhstan’s populace to abstain from borrowing from banks, Tengrinews.kz reported, citing him as telling a briefing in Astana July 22.
“I advise you to abstain from borrowing if you don’t feel confident that you can pay off. Kazakhstan’s people have been excessively eager to take mortgages and consumer loans (…) every one of us strives to better his or her living conditions, which is a natural wish. However, in more developed nations up to 70% permanently live in rented housing. People mostly don’t own the housing they live in”, Mr. Kelimbetov said, adding that he had had experience of taking loans.
“Here at the Central Bank we are often surprised seeing retired people taking loans worth $1 million. How are they supposed to pay such amounts off? Or is it a deliberate action with no intention to pay off? And how do risk managers at banks let such borrowers take that huge loans”, he said at that time.
When commenting on consumer loans, Kairat Kelimbetov said many of the borrowers live from hand to mouth. “There are certain shortages of money in every family once in a while (…) loans enable to neutralize these shortages; however, given that the interest rate is very high, each potential borrower should think over expediency of such borrowing”.
Mid-February 2014 at the extended government sitting Kazakhstan’s President Nursultan Nazarbayev commissioned banks’ heads to reduce the share of NPLs “in any possible ways” to 15% of their portfolio by 2015 and further to 10% by 2016.
As of the end of 2013, the share of NPLs throughout the country’s banking sector stood at 31.2%. According to Fitch Ratings, in February the indicator grew to 33%.
